RBS stands to lose £400 million from broker fraud

RBS stands to lose £400 million from broker fraud




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(Please ignore the "£400 billion" in the newsletter headline, it is meant to read £400 million)

The list of banks and investors that have been exposed to a prominent New York broker’s investment business is continuing to grow. 

The Royal Bank of Scotland, after originally being cagey over how much they had been exposed to Bernard L. Madoff Investment Securities, has now revealed that it stands to lose £400 million.

 

Banking giant HSBC has also been warning shareholders that they could lose up to £675 million from what is being described as the biggest swindle of all time.

 

Global banks and investors have been told that probable losses could run up to $50 billion from the huge Ponzi scheme Mr Madoff, a former chairman of the Nasdaq share market, was running.

 

After being confronted by his sons last week, Mr Madoff broke down and confessed that his business was all “one big lie” and had been insolvent for years. Investors were given abnormally high returns out of money given by subsequent investors, rather than the investment operation generating any real growth, the model of a classic Ponzi, or pyramid, scheme.

 

Mr Madoff was turned into the authorities by his sons and now faces up to 20 years in prison for committing the world’s largest scam run by a single person.

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